Competition and Participation in Religious Markets: Evidence from Victorian Scotland

Abstract

In 1885, the largest churches in Scotland were engaged in a dispute about state funding. We use data generated in the course of that dispute to test two related hypotheses. First, as market size (proxied by population) increases, the competitiveness (or complexity) of the religious market structure will not decrease. Second, religious activity, as measured by giving per member, church income and participation, will not decrease as market competitiveness (or complexity) increases. Empirical evidence lends support to the first hypothesis, but casts doubt on the second, and the supply-side theories underpinning it, which posit a causal link between increased competitiveness (complexity) and higher levels of religious activity. In interpreting the results the importance of a rich understanding of institutional arrangements—particularly market structure, governance and financing—is underlined.

Keywords:

• competition
• institutional structure
• Presbyterian
• Scotland

Acknowledgements

We thank Robert Stonebraker, participants at the SSSR 2006 Conference and two anonymous referees for very helpful comments on earlier drafts. All remaining errors are the authors’ responsibility.

Notes

1 While patronage was the immediate casus belli, we consider it important to understand the Disruption also in terms of the response of evangelical churchmen to social changes associated with the industrial revolution and the urbanisation of Scottish society.

2 The evidence of competitive church building can still be seen in Scotland's towns and cities today. Drummond and Bulloch (1978, Chapter 4) discuss the unfolding competitive church building programme in detail.

3 Fry (1987: 52), “So the Disruption turned out also the most important event in the whole of Scotland's nineteenth-century history, overshadowing even the Reform Act in its repercussions.”

4 Cheyne (1999) is a reliable guide to these literatures.

5 See, for example, Perl and Olson (2000).

6 In 1874, Parliament legislated for the abolition of patronage in the Church of Scotland. This measure was in part a response to the campaign for the disestablishment of the Church of Scotland, launched by the United Presbyterian and the Free Churches a year earlier. The campaign continued until 1886 when Parliament voted decisively against disestablishment. From that point on, the attention of policymakers within the Free and United Presbyterian churches turned to questions of how they might relate to one other, and to the Church of Scotland, in the knowledge that Establishment was, for the foreseeable future, a permanent feature of the ecclesiastical landscape.

7 Membership of Presbyterian denominations accounted for 68 percent of all Church members (including Roman Catholics). In 1885 78 percent of all Church members in Scotland adhered to Protestant denominations. Source: The Distribution and Statistics of the Scottish Churches (1886).

8 He notes (Iannaccone 1998: 1466), inter alia, the resurgence of evangelical Christianity in the US, the rise of Islamic fundamentalism in the Middle East, the rapid growth of Protestantism in Latin America and the religious upheavals in eastern Europe and the former Soviet Union.

9 Smith (1776).

10 Smith's discussions of the role of religion are discussed by Anderson (1988).

11 See Iannacconne (1998).

12 See Perl and Olson (2000) for a discussion.

13 This point is made by Voas et al. (2002: 212).

14 Chaves and Gorski (2001) review this literature.

15 For example, the Royal Commission into Religious Instruction in Scotland (1837) noted evidence from parish ministers in Edinburgh that approximately half of their congregation travelled from beyond the parish bounds to worship.

16 A 1712 Act of Toleration signalled the state's intention not to force members of the population into the Established Church. The repeal of various penal laws against Roman Catholic and Episcopalian adherents in the late eighteenth century effectively removed the remaining legal barriers which had inhibited the ability of rival denominations to establish, gather and serve congregations.

17 Figures for the Free Church were 7 percent for men and 16 percent for women, and for the United Presbyterian Church 4 percent for men and 12 percent for women.

18 Drummond and Bulloch (1978: 148) note, “Between Roman Catholic and Protestant there was a complete lack of understanding.”

19 Montgomery (2003) and Pepall et al. (2006) present horizontal differentiation models where Church rivalry takes the form of greater evangelization efforts or the establishment of social programmes.

20 Montgomery (2003: 795) associates a larger number of denominations with increased competition, but in the context of this proposition this seems too strong a claim, hence we employ the “complexity” proxy.

21 Both complexity and competition share the dimension, “number of firms”.

22 By 1885 the supporters of disetablishment were seeking its inclusion as a prominent element of the Liberal Party's election manifesto.

23 The Roman Catholic Church based their reported measure of affiliation on the number of baptised members of the community. The main Protestant denominations linked affiliation with profession of faith—a more rigorous test. Roman Catholic parish areas generally covered more than one Church of Scotland parish area and had several priests working together within them.

24 Total Church membership was reported as 1.46 million with 1.12 million Protestant and 0.34 million Roman Catholic.

25 The Church of Scotland finally reunited with its competitors in 1929.

26 Evidence of the extent of capacity utilization in the three denominations for 1885 is not readily available. The Reports of the Church of Scotland's Committee for Christian Life and Work in the 1870s did include statistics derived from extensive surveys of ministers, and these suggest utilization of about 25 percent. United Presbyterians continued to claim that attendance exceeded membership into the 1880s, although part of that might be explained by counting children, who could not be members.

27 Following Perl and Olson (2000).

28 Data from 168 local markets in which more than one Church of Scotland congregation is located are omitted from the sample. This exclusion effectively eliminates the majority of the Roman Catholic population which was concentrated in towns and cities such as Edinburgh, Dundee, Aberdeen, Glasgow, Greenock, Paisley, Dumfries, Dumbarton, Hamilton, Kilmarnock etc.

29 Where there is a small number of observations.

30 Or other faith communities. We are grateful to one of the referees for drawing our attention to the work of Hungerman (2005) and Gruber and Hungerman (2006) which is salient in the context of this policy debate.